September 30th, 2010
10:35 PM GMT
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Muhammad Yunus is a man on a mission.  He's been a banker, an economist, and a Nobel Peace Prize winner. He developed microcredit and microfinance, giving loans to entrepreneurs who are just too poor to be considered for bank financing.

You may have heard about his Grameen Bank.  Its founding was what helped him to jointly win the 2006 Nobel Prize.

His most recent book is about what he calls "social business." These are small-scale enterprises run not for profit, but to make an impact.  They are different from charities, because they do make a profit; however, that is not their primary purpose.  They are meant to be self-sustaining, tax paying, revenue generating enterprises that help fix a social problem.

While on his book tour, I had the chance to talk to him at length about the book, and the role of social business in the global economy.

He is passionate about young people.  When he speaks to them at universities he says he finds passion that you can sense he equates with his own.  "Young people are not graduating with their job offers in their hands any more.  They want to make a difference and they see that making money is not what is important. They want to change the world."

Yunus is sharp as a tack, hopeful, and brimming with enthusiasm for his work. He bristles at any suggestion that social business is too small to make an impact, that it's anti-capitalist, or that it just can't work if owners can't be motivated to take profits from the business.  He believes in changing minds.

An early venture in social business involved making fortified yogurt for areas in Bangladesh where most children are malnourished.  This small program struggled to succeed in a country without refrigeration and infrastructure to distribute the yogurt. Women were hired to sell the tubs door-to-door, but cultural barriers got in the way.  Wheat and milk prices shot up in the U.S., and that raised the price-point of the yogurt, hitting sales hard.

It took time, but the venture is now considered a small success, in a big way.

You can read more about this project and others in his book:  "Building Social Business: The New Kind of Capitalism That Serves Humanity's Most Pressing Needs."

And check out our interview. It will make your day.



soundoff (29 Responses)
  1. Maurilio

    It's simply Amazing how a initiave like that (microcredit) disgned to be more feasible in terms of shifting social human condiciton rather than focused only on higher and higher Profits (in fact greed) can change the whole world after financial crises. Yes, there are other ways to do business – There are differents ways to run the Capitalism without only aiming profits for those whose are already wealthy.

    Congratulations Mr. Yunus!!

    Maurilio Cordeiro
    From Brazil

    October 1, 2010 at 12:37 am |
  2. IT makes it possible

    Like the word Social Business.

    You make money in business but this is with an objective of developing people, developing society.

    We all have to have money. With his policies, you make money with other people fortune.

    Both win. Both makes money and a better society.

    Proud of Dr, Younus.

    October 1, 2010 at 6:11 am |
  3. Peter of Canberra, Australia

    I was recently privileged to hear Prof Yunus in Canberra on his dreams for "social business".

    He has a history of making dreams come true for the poorest of our world's poor, trying to live on US$1.25 each day. In our wealthy western world, the value of a cup of coffee can make a difference to these billions of poor.

    Through its Millennium Development Goal 1A, the United Nations wants to: "Achieve full and productive employment and decent work for all, including women and young people".

    Microcredit financing is one answer to those cynics who claim that all foreign aid is wasted through government corruption. Such aid can reach those who want to buy a sewing machine and bolts of cloth, to be self-employed making and selling saris.

    In Australia, a large plasma TV costs about A$5,000. In Afghanistan instead, this could mean child and adult literacy, cleran water and agricultural training for one community. I support the war on poverty.

    Microfinance is one small step for the world's poor and one giant leap for ending hunger and poverty. More – please.

    October 1, 2010 at 7:15 am |
  4. Ann from Melbourne, Australia

    Like Peter in Canberra, I too was lucky enough to hear Muhammad Yunus speak about Microfinance and Social Business in Melbourne, Australia.

    Yes, Dr Yunus dreams of a world without poverty. His dreams of a bank for the poor came true through his Grameen Bank and now his dreams of finding another way of 'doing' business is also coming true through 'Social Business'.

    But what is different about these dreams of Dr Yunus? His dreams become a reality because Muhammad Yunus is also a man of action, tackling major barriers that prevent the poor from improving their lives, step by step. Muhammad goes where others fear to go, like providing banking for the poor.

    To all those cynics out there, take note......good aid works. Poverty is not a god-given reality. It is man-made by those who look the other way and take no action.

    We need more people to believe that dreams can come true by the actions of each of us.

    October 1, 2010 at 8:10 am |
  5. Jarno

    What a great man, with great ideas. Very much liking the "social business" idea, and the micro-loans are absolutelly brilliant.

    These sorts of ideas I think everyone should be able to get behind – from the concervative to the liberal. He's not giving hand-me-outs, he's enabling people to make a living at improving their or other people's lives. That's a really noble and worthwile goal.

    October 1, 2010 at 10:17 am |
  6. Hassan Mehedi

    He is a great person and Bangladeshi peoples are proud for him .
    His project (Microcredit) is probably the best solution for poor and poorest peoples in the EARTH.

    In my point of view , in a long future ,his idea will change the whole world.

    Thanks again Mr Yunus.

    Hassan Mehedi
    from London

    October 1, 2010 at 1:19 pm |
  7. shecky

    the weakness of this model is quite obvious. non-social enterprise owns the structure whereby this social model obtains things like raw materials, workforce etc. it can easily manipulate the costs of these, putting a socially oriented construct in jeopardy.although it is certainly an admirable thought and probably worth doing, it is doomed to failure since it relies on monetary circulation.

    October 1, 2010 at 1:59 pm |
  8. Kojo Sam Eghan

    Indeed, what the underprevilaged need for social transformation is education , good health and other social amenities. In developing countires, governments are making the effort , albiet limited to improve conditions .

    The private sector is very central to the realisation of key social objectives. The contibution of most capitalist to social development has been with the intent of promoting a dual objective ; position their interest and give a "little" back for social development .

    This approach must be supported . However little the impact , a difference can me made .

    Regards

    October 1, 2010 at 4:39 pm |
  9. Christopher Kelley

    What strikes me is in the Federal Republic in my country there has evolved a believe that Republicanism equates to Capitalism. While capitalism is praised in my country for creating the greatest weath, the talking heads forget for the first 150 years of the United States' history, we used slave labor and then after that during the industrial revolution we exploited child labor and simply very poorly paid and overworked labor.

    Today, corporations under the banner of capitalism pose a greater threat to Americans' Constitutionally guaranteed inalienable rights than Stalin, Hitler or Mao Tse Tsung.

    October 1, 2010 at 4:47 pm |
  10. Roure

    If we can spark up what we se on the video ,"Rebuilding Pakistan after the floods',where police,military and cevilians work for reconstruction for road links to market their goods ,we should work immediately on Dr. Muhammad Yunus ideas where he developed microcredit and microfinance giving loans to the poor for their business and goods.They could also become shareholders dollar by dallar, as they can give, for bigger loans on their money.

    Where do you get the money to start ? I'm shure any philanthropy millionaire will cooperate in these troubled times with just 500,000 which doubles in these countries,

    October 1, 2010 at 5:54 pm |
  11. Ann Roser.

    That's a good book for people who want to do business for more than profit.

    October 2, 2010 at 1:17 am |
  12. Sue from Woolamai

    Microcredit has been developed over 30 years. Currently over 100 million poorest families of the world access such small loans for creating income earning businesses. Yet it was only in March this year that Australia launched it's 'Financial Services for the Poor – A Strategy for the Australian aid program 2010-2015'! So now it's time to implement an effective program using this strategy. It will provide more consistent and broader support for microfinance initiatives, which are so important for increasing poor people's incomes and also improving their health and education.
    I'd like to see some action now – allocation of more funds namely $45 million per year instead of the current $20 million, and they must target the poorest people and use specific measures of social performance to guage the impact of the programs supported. Thanks Prof Yunus for your energy, creativity, determination and action – all for having poverty wiped from the planet!

    October 2, 2010 at 6:54 am |
  13. John Obikwu

    Nice idea & article!
    Hopefully one day the idea of "social business" would hit Africa and more so Nigeria were the difference the rich & the poor is so massive & there is a grave socio-econmic imbalance that promotes crime from the masses.

    October 2, 2010 at 10:58 am |
  14. elfelipe

    since nobel price staff laureated obama and dalai lama, i have been totally disappointed by this fake price

    October 3, 2010 at 1:42 am |
  15. Adelki

    Banks are controlling the noble prizes. Who gave him a peace prize was in fact a bank system, what do you expect from this guy? Peace plan ? No another economy plan whatelse?

    October 3, 2010 at 3:32 pm |
  16. mounick

    @Maurilio the industry is ofcourse based on greed. look at the interest rates they charge almost 4 times the official one. if u are really helping people it has got to be 1/4rth

    October 3, 2010 at 5:23 pm |
  17. janardhanan58@gmail.com

    big white collar cartel cement cost raise 140 to250 rupees must stop
    cut down cost , too worst cost raise must stop import from Bangladesh
    Korea Dubai and other part cement import needed Chennai govt open
    mouth neded urgent .India Tamil nadu worst raise cement cost 140 to
    250 why this raise
    please stop cost increase poltical reason cement cost raise please
    look round reduce cost

    October 4, 2010 at 1:51 am |
  18. shecky

    admit it. adhering to a monetary economy in no way promotes the rights and abilities of the less fortunate. microcredit is the exact same deal, in a new more costly (view the interest applied) format, made widely available to individuals who would be as well off utilizing a barter system. it is a system of extending monetary economics to those who have no true use for it.

    October 4, 2010 at 6:33 pm |
  19. Erik Wassenich

    The purpose for most businesses is to make profit, as much profit as possible. Manufacturers have products made in Asia, for example for $6 a piece selling it in the US for $299.
    If a product can be sold for $299, it can also be manufactured in the US. A company has a responsibility to the community in which it operates. If it wants to sell its products in that community, the product should be made in that community, giving work and income to the people living there. This is what is wrong with business today. It no longer is a good neighbor, an employer, a tax payer. The corporate headquarter is on some small island where it does not have to pay taxes. US cities and towns are deep in debt, people lose their houses, stores close – the jobs have gone to Asia. A $6 item from Asia brings in 3000% profit, but where does this money go?

    October 5, 2010 at 11:13 pm |
  20. Carol. Sydney, Australia

    There, but for the grace of God go I, scrabbling through rubbish dumps to find enough recyclable items to make $1 a day to share with my family.

    Those of us fortunate enough for this not to be our reality should support the endeavours of inspired people such as Professor Yunus. Give what we can in time or money and remind our governments how vital it is for them to honour pledges made to give financial aid to such institutions as the Global fund to Fight HIVAids, TB and Malaria.

    Governments react to voter pressures. Big business reacts to market forces. They need to be shown alternatives to business-as-usual (read GFC). Creative solutions by individuals can address the big issues facing the developing world and our endangered planet They can drag governments and businesses along with them. Prof. Yunus is living proof of this with the Grameen Bank and Microfinance

    Scepticism and pessimism will only drag these "social business" efforts down, and to what end? Disaster without even trying to make this world a better place? How unproductive. How sad!

    Let's take up the challenge, do our bit, whatever that is, encourage others to do the same and not only will we make a difference to others but we will enrich our own lives in the process. Doing something has got to better than being an unhappy spectator, or worse an unwilling participant.

    October 6, 2010 at 11:51 am |
  21. Adam

    @Adelki, you are confused. There are Nobel Prizes awarded in physics, chemistry, physiology or medicine, literature and for peace. ONE of them is awarded by "Sveriges Riksbank" which is what Swedish central bank is called (similar to the Federal Reserve in the U.S.), and that is of course the Nobel Prize in economics. The other prizes have absolutely nothing to do with any banks.

    The prizes in physics and chemistry are awarded by the Royal Swedish Academy of Sciences, the Nobel Prize in Physiology or Medicine is awarded by the Nobel Assembly at Karolinska Institutet (a leading medical institution), the literature prize is awarded by the Swedish Academy (a several hundred year old institution consisting of distinguished authors). Finally, the peace prize is awarded by a committee of five persons who are chosen by the Norwegian parliament, thus the only prize awarded outside of Sweden. This is because Alfred Nobel himself wanted it that way (at that time Norway was under Swedish rule). For more info, visit nobelprize.org.

    October 7, 2010 at 5:25 pm |
  22. Peter of Canberra, Australia

    Thanks to "Adam" on 7 October, for clarifying the bases of how the various Nobel Prizes are awarded and by whom. I had not been aware of the indirect influence of the Norwegian Parliament on the Peace Prize.

    Muhammad Yunus has had 35 years of successes in targeting poverty through the "economics" of microcredit lending. It is significant he was awarded the Nobel PEACE Prize (rather than Economics).

    It was a Nobel prize for a noble cause. All we are saying is give "peace" a chance.

    October 10, 2010 at 10:29 pm |
  23. Amy

    Please everyone have a look at the organization that is making microloans happen at the individual level. You and I as individulas lending to impovershed micro businesses. Each of us can be part of this solution. The concept is awe inspiring and a way you can absolutely feel a part of a solution, being a financier .Please visit http://www.KIVA.org. These folks are celebrating three years of success and should be our next Nobel reciepients.
    Please have a look and be part of the solution.
    As a side note: I don't work for them I lend with them, and I live on a fixed income.

    October 11, 2010 at 11:53 am |
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